China's banks to raise funds

CHINA&rsquo;S largest listed 11 banks are seeking to raise tens of billions of dollars in extra capital in order to satisfy regulators.<br /><br />The banks have expanded levels of lending to record levels and must now find at least Rmb300bn (&pound;26bn) ($43bn) in new capital.<br /><br />The banking regulator has warned that it will refuse approvals for expansion unless the lenders have more capital in their coffers.<br /><br />It warned banks that their lending levels should be &ldquo;stable and sustained&rdquo; until the end of the year.<br /><br />The Shanghai Composite Index fell by 3.45 per cent after yesterday&rsquo;s announcement.<br /><br />Following government orders to pump new funds into the domestic economy in the face of the global crisis,&nbsp;Chinese banks extended a record Rmb8,920bn in loans in the first 10 months of the year.&nbsp;That was&nbsp;up by Rmb5,260bn from the same period a year earlier.<br /><br />That meant that the banks&rsquo; capital adequacy rates dropped from just over 10 per cent at the close of last year to 8.89 per cent at the end of September.<br /><br />Bank of China has been the most aggressive lender this year, adding more than Rmb1,000bn in new loans in the first six months.